SoAs Still Too Long For Consumers

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Statements of Advice (SoA) are still too long and many advisers are not making efforts to reduce their size causing clients to not understand the advice they are being presented, a fintech firm has claimed.

YTML General Manager Advice Delivery, Terri Ho

YTML, General Manager of Advice, Terri Ho said the firm, which provides a number of advice technology solutions, has examined more than 50 different SoA templates in the past three years and “…over 80 per cent of these were over 40 pages long. The longest I have seen is 130 pages.”

Ho said, apart from the length of SoAs, advice being presented lacked clarity and contained too much jargon and often had other documents attached to further explain the information in the SoA.

“Many SoAs we remedy have usually become too long and more complex because of licensee and adviser disclosures on related parties and other conflicts of interest, as well as paragraphs of technical and general information,” Ho said, adding that disclosures should be reserved for financial services guides and product disclosure statements.

“Due to the length [of SoAs], some advisers therefore create yet another document to explain the advice, in addition to the SoA. This can create inconsistencies and inefficiencies and can mean five or six documents are provided to the client,” Ho said.

Ho said SoA templates were useful but should only be used as a starting point, adding that SoAs must be personalised but it should not take days to prepare.



3 COMMENTS

  1. The SOA is quite possibly the biggest joke of a document. It is nothing but a political document to save the backside of the adviser and the licensee. Deadset if half the disclaimers, understanding series and the rest of rubbish that consumers could not care less about was taken out then maybe an everyday mum and dad might have half a chance of understanding some it.

  2. Even at 130 pages an SOA is still a damn sight shorter and less complex than the typical PDS!

  3. Ms Ho, I assume that you are referring to Risk SoA’s only. One problem is the amount of information advisers are required to include in an SoA. This is the result of regulation and licensees trying to ensure their advisers’ SoA’s comply with such regulation.

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